xcel chapter 4 A

Which of these riders will pay a death benefit if the insured's spouse dies?

Family term insurance rider

All of these are characteristics of a universal life insurance policy EXCEPT

Fixed surrender value

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

Universal Life policy

Which of the following are the premium payments for a Universal life policy NOT used for?

Separate account investments

Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be

500,000.00

Which policy feature makes a universal life policy different from a whole life policy?

A flexible premium schedule

A Modified Endowment Contract (MEC) is best described as

A life insurance contract which accumulates cash values higher than the IRS will allow

All of these are valid options for an Adjustable Life Policy EXCEPT

A nonforfeiture option can be used to increase the death benefit

A policyowner may change two policy features on what type of life insurance?

Adjustable Life

What happens to the coverage under a children's term rider when that child reaches a certain specified age?

Coverage is eliminated

Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?

Decreasing term insurance

Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?

Equity index whole life

A spouse and child can be added to the primary insured's coverage as what kind of rider?

Family term

Which type of life insurance is normally associated with a Payor Benefit rider?

Juvenile insurance

What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?

Last Survivor Life insurance

An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called

Partial Surrender

Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance?

Policyowner has the right to select the investment which will provide the greatest return

Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test?

Pre-death distributions are typically taxable

What does the word "level" in Level Term describe?

The face amount

Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?

The face amount and premium will remain constant over the 10-year period

A partial surrender is allowed in which of the following life policies?

Universal life

Which of these would be the best example of a limited pay life insurance policy?

Whole life policy with premiums paid up after 20 years

When a decreasing term policy is purchased, it contains a decreasing death benefit and

decreasing premiums

The least expensive option to pay off a 30-year mortgage balance would be

decreasing term life

Level premium permanent insurance accumulates a reserve that will eventually

equal the face amount of the policy

Index whole life insurance contains a securities component that acts as a(n)

hedge against inflation

A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n)

limited pay policy

A life insurance policy that has premiums fully paid up within a stated time period is called

limited payment insurance

Decreasing term life insurance is often used to

provide coverage for a home mortgage

What is the automatic continuance of insurance coverage referred to as?

renewal

The type of policy which pays on the death of the last person is called

survivorship life

A securities license is required for a life insurance producer to sell

variable life insurance

Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds

will no longer provide insurance protection

Which type of policy combines the flexibility of a universal life policy with investment choices?

Variable universal life policy

All of these statements concerning whole life insurance are false EXCEPT

When a whole life policy is surrendered, income taxes may be owed

Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)?

Death benefit

The premium for a Modified whole life policy is

lower than the typical whole life policy during the first few years and then higher than typical for the remainder